The longer the trade war continues, the more dangerous the situation becomes for the growth of the world economy. China and the United States will be able to digest this, but other Asian countries may have a harder time. Japan, South Korea and Taiwan are highly dependent on exports and will be most affected by continuing trade war.
The growth of the world economy is not helped by the continuing trade war between the United States of America and China. Although American President Donald Trump wants to make it difficult for China, it is the other Asian countries that are most affected by this.
Countries such as Japan, South Korea and Taiwan are closely related to the Chinese economy and are highly dependent on the economic situation. These countries export a lot to China to supply consumers and businesses. So if the economy in China runs less smoothly, there is less demand for goods and services and therefore less export for these countries.
Steve Cochrane, economist at Moody’s Analytics, emphasizes that Japan, South Korea and Taiwan are equally hard hit by the United States. They therefore also benefit from the fact that the conflict between the USA and China is resolved as quickly as possible in view of their "exposure".
This is also clearly visible on the stock exchanges, the indices in the countries concerned are among the largest "losers" in Asia. On the other hand, as soon as a new trade agreement is reached, the indices of these countries will recover strongly to higher regions.
We do not have a clear picture. With Donald Trump it is always unclear which direction we are heading. The meeting at the G20 summit at the end of this month may create a little more clarity, but with Trump you are of course never sure.
Sources: CNBC
